Diamond Sports gets approval of $450 million DIP financing

By Sarah Lizee

Olympia, Wash., Feb. 26 – Diamond Sports Group, LLC received approval to enter into a $450 million debtor-in-possession facility, according to an order filed Monday with the U.S. Bankruptcy Court for the Southern District of Texas.

The DIP financing is part of the company’s restructuring support agreement, which was reached with some holders of its prepetition debt and Amazon on Jan. 16.

The new reorganization path replaces the baseline winddown business plan outlined in the prior agreement between the debtors, some first- and second-lien creditors and the official committee of unsecured creditors.

The company said the new deal has the support of 85% of first-lien lenders, more than 53% of second-lien debtholders and more than 70% of unsecured noteholders.

Some participating creditors committed to provide the debtors with the $450 million subordinated secured super-priority DIP facility. Alter Domus (US) LLC is the administrative agent, and Kroll Restructuring Administration LLC is the syndication agent.

Holders of second-lien claims, third-lien claims and unsecured note claims are eligible to participate.

Interest will be 10% per annum, comprised of 5% per annum payable monthly in cash and 5% per annum payable in kind, compounded monthly.

The facility has a maturity date of Nov. 30, 2024.

There is a 15% commitment premium.

The DIP facility will be used to provide the debtors with an incremental $100 million of necessary liquidity, with the remaining $350 million used to refinance a portion of the debtors’ first-lien loans.

While the DIP facility is currently expected to be repaid in full at the end of the cases from the proceeds of the debtors’ settlement with parent Sinclair as well as additional financing to be obtained upon emergence, $210 million of the DIP facility may be rolled into an equal amount of exit debt in the event the settlement proceeds are not received.

Diamond Sports Group is an independently managed and unconsolidated subsidiary of Sinclair Broadcast Group. Diamond owns the Bally Sports Regional Sports networks, a provider of local sports. The Baltimore-based company filed Chapter 11 bankruptcy on March 14, 2023 under case number 23-90116.

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